Which Is a Leakage Out of the Circular Flow

question 41

Multiple Choice

Which is a leakage out of the circular flow?

• A) exports
• B) business investment spending
• C) transfer payments
• D) personal savings
• E) consumer spending

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Definitions:

Accounting-Based Incentives

Accounting-Based Incentives are rewards given to managers or employees based on reaching specific financial performance targets.

Executive Compensation

This refers to the financial payments and other non-monetary benefits provided to high-level management and executives in a company, including salaries, bonuses, stock options, and other perks.

Shareholder Value

The financial worth delivered to shareholders, typically measured by the increase in share price and dividends paid over time.

Capital Adequacy Ratio

A measure of a bank's capital, used to protect depositors and promote stability and efficiency in financial systems.